Title

[Job] Locked and [Un]loaded: The Effect of the Affordable Care Act Dependency Mandate on Job Lock in the U.S. Army

Award Year

2018

Grant Type

Early Career Research Award

Description

One concern with employer-based health insurance is the inability for workers to switch to jobs or careers that would be better matches; also known as job lock. We use the implementation of the Affordable Care Act’s dependency mandate that allowed young adults under 26 years old to return to their parents’ health insurance as a natural experiment. The unique labor market conditions of the United States Army overcomes some data limitations in previous studies including the ability to examine workers with uniform pay and health coverage. This paper uses de-identified administrative data from the United States Army for soldiers on term contracts from 2007-2009 and 2011-2013 to determine the ACA’s effect on reenlistment rates for soldiers under age 26. A difference in differences identification strategy comparing soldiers ages 27-29 and 23-25 before and after the ACA’s implementation is used to identify the ACA’s impact on soldiers decisions to stay in the Army. Our preliminary results find that the ACA decreased reenlistment rates by 2.7 percentage points or five percent for enlisted soldiers ages 23-25. We also find that younger veterans who leave the Army after the passage of the ACA are more likely to attend college via the Post 9/11 GI Bill. Thus the ACA may increase the firm’s turnover, but may encourage younger workers to attend college and pursue other careers.

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